Business Policy

GENERAL BUSINESS POLICY: PROCEDURES AND RULES

PROCEDURES Derive from and conform to policies but are more tactical, specific, concrete, and detailed than policies. It serves as a management control mechanism by standardizing daily operations to ensure consistent processing of recurrent tasks. It specifies how recurring tasks are to be executed and enumerate both the steps and sequence to be followed.

Procedure Steps 1. Needs Analysis Identify existing policies and procedures that require amendment, Or will be superseded New Policy or Procedure - Communicate with appropriate Policy Sponsor to confirm creation of new policy. - Advise Governance and Policy Unit, via email, of intention to develop New policy or procedure together with: a) Proposed title b) Impacted policies/procedures c) Indicative timeframe for development Policy or Procedure Amendment - Advise Governance and Policy Unit, via email, of intention to amend Policy or procedure and confirm whether amendment is major or Minor amendment - Obtain latest version of policy/procedure from Governance and Policy Unit for editing 2. Consultation and Drafting Review similar policies/procedures at other organisations, relevant Literature and best practice Identify stakeholders for consultation during development/review, The best way to consult with them and time constraints for Consultation Identify the impact of proposed policy/procedure changes on Stakeholders, systems, administration and address these within Drafting, or note in the implementation section of the Policy and Procedure Request for Approval form Draft policy and/or procedure

Responsibility

Policy Owner

Policy Owner Policy Owner

Policy Owner

Governance and Policy Unit

Policy Owner Policy Owner

Policy Owner

Policy Owner

Draft or edit any supporting documentation, such as forms or Unit rules/work instructions and insert references in Supporting Documentation Take draft policy/procedure to stakeholders and those affected for feedback. Redraft as necessary using tracked changes to show Amendments since previous version Obtain recommendation for approval of final draft from Policy Owners management group or policy working group (if appropriate), Or from the Policy Owner

Policy Owner

Policy Owner

Policy Owner

3. Authorisation Submit electronic copies of final draft to Governance and Policy Unit For review and submission to committees on the approval pathway Communicate with: - Governance and Policy Unit to confirm approval pathway and date of Meeting at which policy/procedure will be presented - Policy Sponsor to ensure they are able to support policy/procedure Through approval pathway 4. Communication and Implementation Advise Policy Owner of approved policy/procedure Undertake steps outlined in Communication & Implementation Plan Section of Request for Approval form Publish approved policy/procedure on Policies & Procedures Directory Forward copy of approved policy/procedure and Request for Approval Form to Records Management for filing

Policy Owner Policy Owner

Governance And Policy Unit Policy Owner Governance And Policy Unit Governance And Policy Unit

5. Maintenance Record issues identified through implementation, training or on-going Management; as well as changes affecting policy or procedure in Policy & Procedure Issues Log for incorporation into subsequent review 6. Review Review policy and procedure every two years, or earlier as required Check that policy and procedure is still current Major Amendment Required - Undertakes 1-4 above Minor Amendment Required - Advise Governance and Policy Unit, via email, of intention to amend

Policy Owner

Policy Owner Policy Owner

Policy Owner

-

-

Policy or procedure and confirm whether amendment is major or Minor amendment Obtain latest version of policy/procedure from Governance and Policy Unit for editing Amend copy of policy/procedure using tracked changes and inserting Summary of changes in Version Control and Change History section Obtain approval to minor amendments from Policy Owners management Group or policy working group or from Policy Owner Forward electronic copy following to Governance and Policy Unit For publication on Policies & Procedures Directory: a) Final Draft showing changes made since last approved version, Using tracked changes; b) Completed Policy & Procedure Request for Approval form Published approved policy/procedure on Policies & Procedures Directory Forward copy of approved policy/procedure and Request for Approval Form to Records Management for filing No Amendment Required Forward memo to Governance and Policy Unit advising: a) Policy/Procedure has been reviewed by the relevant Approving Body and no amendment is required b) Next review due date (if earlier than default two years from review Date) Update Version Control and Change History section of Policy/Procedure On Policy & Procedure Directory with last reviewed date, name of the Relevant Approving Body and next review date Forward memo from Policy Owner to Records Management to file

Governance And Policy Unit Policy Owner Policy Owner Policy Owner

Governance And Policy Unit Governance And Policy Unit Policy Owner

-

Governance And Policy Unit Governance And Policy Unit

-

-

-

Policy/Procedure No Longer Required Forward to Governance and Policy Unit completed Policy & Procedure Policy Owner Request for approval from outlining: c) Reason for deletion d) Actions required as a result of removal of policy/procedure e) Consultation that has occurred regarding deletion of policy/procedure Communicate with: Policy Owner a) Governance and Policy Unit to confirm approval pathway and date Of meeting at which request will be presented b) Policy Sponsor to ensure they are able to support the request through Approval pathway Advise Policy Owner of approved request for deletion Governance And Policy Unit Undertake steps outlined in Communication & Implementation Policy Owner

-

Plan section of Request for Approval form Remove policy/procedure from Policy & Procedures Directory Forward last version of policy/procedure and Request for Approval Form to Record Management for filing Overdue Policy or Procedure Review Governance and Policy Unit will communicate with Policy Owner Regarding overdue review to agree timeline for review Policies/Procedures not reviewed three years from date of last Review forwarded to appropriate approving body for deletion from Policy & Procedure Directory Remove policy/procedure from Policies & Procedures Directory Forward last version of policy/procedure and approval for deletion to Records Management for filing

Governance And Policy Unit Governance And Policy Unit Governance And Policy Unit Governance And Policy Unit Governance And Policy Unit Governance And Policy Unit

-

Definitions Word/Term Policy Definition A formal statement which gives effect to relevant principles, values, procedures, requirements and strategic goals and improves the Universitys risk management A person with over aching responsibility for policy and procedure and for ensuring the policy and procedure is implemented, progress is monitored and the policy and procedure are regularly reviewed. Policy Owners are normally Heads of Management Units (President or CEO). A person who has the authority to approve policies and procedures. Policy Sponsors will be theBoard ofDirectors. A person who explains the policy to the lower management. Governance and Policy Unit is the Middle management (Branch Managers & Departmental Managers).

Policy Owner

Policy Sponsor

Governance and Policy Unit

RULES Business Rule is a criterion used to guide day-to-day business activity, shape operational business judgements, or make operational business decisions. It is under business jurisdiction. It means that a business can, as sees fit, enact, revise, and discontinue the business rules that govern and guide it. Formulated by a policy manager. A policy manager is a business expert and owners of business policy who is responsible for enforcing business policy through the creation and maintenance of rules.

-

Every Business Rule Statement should use a Rule keyword (must, only) has a complete sentence form always removes some degree of freedom. If it is not, it is called a Statement of Advice.

Difference between Business Policies and Business Rules Rules are clear instructions that must be followed by the entities. And in case, if rules are not followed, then entity will have to face some legal action in the form of penalties, suspension, and etc. So basically rules are given the ability to have the protection of their own. It is practicable. Policies relates to how the rules are going to be implemented. Entities design their policies on the basis of rules applied by regulatory authorities AND their business objectives. Policies basically give a direction to the entity that is in line with both applicable laws and aims that business wants to achieve. Example: Business Policy: Construction Safety Policy It is a company policy that accident prevention be a prime concern of all employees. This includes the safety and well-being of our employees, subcontractors, and customers, as well as the prevention of wasteful, inefficient operations, and damage to property and equipment. Business Rules: Basic Safety Rules A. All injuries, regardless of how minor, must be reported to your supervisor and the Safety Office immediately. An employee who fails to fill out a "Notice of Injury Form" and send it to the Safety Office can be issued a safety violation notice and may be subject to termination, in accordance with company policy. In the event of an accident involving personal injury or damage to property, all persons involved in any way will be required to submit to drug testing.

B. Hard hats will be worn by all employees on the project site at all times. The bill of the hard hat will be worn in front at all times. C. Safety glasses will be worn as the minimum-required eye protection at all times. Additional eye and face protection such as mono-goggles and face shields are required for such operations as grinding, jack hammering, utilizing compressed air or handling chemicals, acids and caustics. D. Clothing must provide adequate protection to the body. Shirts must have at least a tee sleeve. Shirts with sleeves and long pants will be worn at all times. No shorts are to be worn on projects. All employees, except welders and burners, must tuck shirt tails inside trousers. Burners and welders will not be permitted to wear polyester or nylon clothing. Sturdy work boots with rigid, slip resistant soles are required. No clogs, tennis shoes or loafers are permitted. Steel-toed tennis shoes with the ANSI label are the only alternative to the leather work boot. E. All personnel will be required to attend safety meetings as stipulated by project requirements in order to meet OSHA Safety Standards.

1.3 Formulating and Implementing Policies Business policies define all functional areas in the company from marketing, finance, operations, to personnel or management. The formulation of policies is established to avoid problems and/or address unfavorable repercussions that may arise from any entity of the organization. Business policies enable institutions, organizations, or enterprises to function efficiently and systematically. Essential to business management is a business policy that defines processes and practices within the organization. The process of policy formulation may be carried out in six progressive steps: 1. Record Present Policy This step is the formulation for subsequent steps. For a business organization that is managing in accordance with well-defined policies, it will be easy for the executive to record present policy. In recording present policy it is important to clarify the criteria that the top management wants to use as to the kind of company they want to operate. The kind of company management they want to operate will be expressed in terms of concepts of social responsibility.

2. Identify Policy Problems The present policy is reappraised to determine whether policy problems exist. A policy problem is a major problem that may have a significant influence on the future success of the business organization as a whole. In reappraising present policy, one must first look at the organizations environment. For short, one needs to establish premises about the environment on which analysis of business operation can be based. Policy problems may take the form of threats or opportunities in the environment, failure to meet plans; adverse trends with respect to market share, competitive advantage or financial conditions or other indications of loss of health.

3. Diagnose the Cause If the analysis reveals that the policy problems exist, there follows the task of diagnosing the cause. The root of the problem may lie in (1) an inadequate strategy: it may be attempting more than its resources will permit; it may be threatened by environmental developments (2) inappropriate implemental approach: the organization structure may not be providing for effective organizational processes (3) suffering from ineffective management: the managers of the major functional areas may be ineffective. Basically, effective prescription of a cure requires identifying the cause.

4. Formulate Alternative Policies The moment the cause is identified, the next approach calls for the formulation of alternative ways of removing the cause. Whether the underlying cause has to do with strategy, implementation, or management, or a combination of these, all alternatives that appear to offer some possibility of providing a solution shall be consider. The important thing at this stage is that no possible alternative be overlooked.

5. Evaluate Alternative Policies The evaluation of alternatives requires analysis and comparison with respect to relevant factors. It requires recognitions of the relevant considerations and evaluation of alternatives with respect to each. The product of this analysis is a ranking of every alternative with respect to each relevant consideration. One is thus faced with a trade-off. Maximization with respect to one factor at the expense of another. This is a characteristic of business policy problems which, along with diagnosis, makes them the most difficult problems facing management. Probably, the best one can hope to do is to choose that alternative which offers the best blend of advantages.

6. Choose a New Policy Choosing the particular policy to be proposed requires the final step of evaluating the relative significance of the various considerations. One must identify those factors which the decision turns. The choice of the new policy marks the end of the basic six-step procedure of policy formulation.

Steps for Implementing a Company Policy Not every problem can be solved with the implementation of a new company policy. So when you have a legitimate reason to institute a company policy, what should you do to make sure your policy will be internalized and followed? A great company policy is implemented in seven steps.

1. Determine the Necessity of the Policy Dont fall into policy overload by taking a new-policy-first approach to every staffing and management challenge. If you do, your new policies will be less likely to stick and your established ones may lose their existing traction. So think carefully.

2. Clarify the Policy Goals How exactly will working conditions change or productivity improve once the new company policy is implemented? Have clear long-term goals in mind before any writing begins.

3. Gather Information and Sample Policies Find out everything you need to know about how the new policy will be implemented and what changes will likely result. Gather all the data available on how policies like this one tend to succeed or fail, both in your companys history and in the larger world. As you do this, learn from the experience of others.

4. Write, Rewrite, and Review Draft the policy carefully, taking every contingency into account. Anticipate the kinds of questions employees will have and the challenges theyll face as they put these new rules into effect. Make sure every aspect of the policy is relevant, clear, and executable.

5. Inform the Troops If possible, give the affected employees some lead time so they can make the necessary adjustments before the new policy goes into effect. Employees should be informed in a way that reaches everyone and provides enough time to address their questions and concerns.

6. Obtain Management and Legal Support Submit the new policy to your in house counsel or relevant legal authority and make sure it doesnt represent discrimination, conflict of interest, or any other legal obstacle. When the legal kinks are ironed out, youll need to win the approval of management before the policy can be put into place.

7. Implement the Policy Once youve completed the first six steps, be prepared to implement the policy and make it stick. A weak policy is worse than no policy at all. So if the practical realities of enforcement become a problem, dont just let the policy wither away. Take action and change or revoke it.

EXAMPLES: 1. Last August 23, 2004, MERALCO Companys Conflict of Interest Policy took into effect. And last July 30, 2012, the Board of directors approved the revision of this policy and took effect on August 15, 2012. It now supersedes the previous Conflict of Interest Policy adopted by the company. From this information, it is obvious that something related to conflict of interest happened in this company that made them decided to make some changes or revisions on their

existing policy. Like I said a while ago, it could be caused by strategy, implementation or management. (I made a research about it but no information was available. The available information is limited only to their policy) 2. Samsung re-evaluates labor policy at its factories in China September 5, 2012. Samsung has acknowledged poor working conditions at its factories in China after a labor group said investigators found widespread abuses. An official at the South Korean company said it will start re-evaluating its labor practices in China. The official said new product launches and production lines have led to long hours of work. The company was responding to China Labor Watch's investigation of six Samsung-owned plants and two suppliers in China. The watchdog said it found forced and excessive overtime, exhausting working conditions that require most employees to work standing, and other labor abuses at the eight plants. How did Samsung respond to it? Samsung did not identify any instance of child labor during the audits after reviewing HR records of all workers aged below 18 and conducting face-to-face ID checks. However, the audit identified several instances of inadequate practices at the facilities, including overtime hours in excess of local regulations, management of supplier companies holding copies of labor contracts, and the imposition of a system of fines for lateness or absences. We are now designing, researching, and/or implementing corrective actions to address every violation that was identified. Corrective actions include new hiring policies and work hours and overtime practices, among other steps, to protect the health and welfare of employees.

New Hiring Policy to Avoid Child Labor Samsung has a zero tolerance policy on child labor violations. Although we did not identify any child labor during our audits in September, we have demanded all suppliers to adopt a new hiring process immediately, and contracts with suppliers who use child labor will be terminated. All candidates will be interviewed in person before hiring to strengthen identity verification measures and to detect fake IDs. Special guidelines on the banning of child labor were distributed to all suppliers with necessary training provided. Working Hours Policy We have identified the need for initiatives to reduce employee overtime as a top priority, and we are researching and developing measures that will eliminate hours beyond legal limits by the end of 2014. Samsung will develop a longer term plan to resolve working hour practices by the end of 2012.

A COMPREHENSIVE STRATEGIC-MANAGEMENT MODEL

The strategic management process means defining the organizations strategy. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet the entire present and future competitors and then reassesses each strategy. The strategic-management process can best be studied and applied using a model. Every model represents some kind of process. The framework illustrated above is a widely accepted, comprehensive model of the strategic-management process. This model does not

guarantee success, but it does represent a clear and practical approach for formulating, Implementing, and evaluating strategies. When companies want to create their own strategic management process model, it includes understanding the importance of using individual strategic initiatives and tying its companywide resources to the successful completion of goals and objectives. These are three important questions to answer in developing a strategic plan: Where are we now? Where do we want to go? How are we going to get there? Identifying an organizations existing vision, mission, objectives, and strategies is the logical starting point for strategic management because a firms present situation and condition may preclude certain strategies and may even dictate a particular course of action. Many organizations today develop a vision statement that answers the question What do we want to become? Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Mission statements are enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firms operations in product and market terms. It addresses the basic question that faces all strategists: What is our business? The purpose of an external audit is to develop a finite list of opportunities that could benefit a firm and threats that should be avoided. As the term finite suggests, the external audit is not aimed at developing an exhaustive list of every possible factor that could influence the business; rather, it is aimed at identifying key variables that offer actionable responses. External forces can be divided into five broad categories: (1) economic forces; (2) social, cultural, demographic, and natural environment forces; (3) political, governmental, and legal forces; (4) technological forces; and (5) competitive forces. The process of performing an internal audit closely parallels the process of performing an external audit. Representative Managers and employees from throughout the firm need to be involved in determining a firms strengths and weaknesses. The internal audi t requires gathering and assimilating information about the firms management, marketing, finance/accounting, production/operations, research and development (R&D), and management information systems operations. Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Long-term means more than one year. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Objectives should be challenging, measurable, consistent, reasonable, and clear.Once a clear picture of the firm and its environment is in hand, specific strategic alternatives can be developed. Strategy analysis and choice seek to determine alternative courses of action that

could best enable the firm to achieve its mission and objectives. The firms prese nt strategies, objectives, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies. The strategic-management process does not end when the firm decides what strategy or strategies to pursue. There must be a translation of strategic thought into strategic action. Successful strategy formulation does not at all guarantee successful strategy implementation and successful strategy implementation depends on cooperation among all functional and divisional managers in an organization. Marketing departments are commonly charged with implementing strategies that require significant increases in sales revenues in new areas and with new or improved products. Finance and accounting managers must devise effective strategy-implementation approaches at low cost and minimum risk to that firm. R&D managers have to transfer complex technologies or develop new technologies to successfully implement strategies. Information systems managers are being called upon more and more to provide leadership and training for all individuals in the firm.Once implemented, the results of the strategy need to be measured and evaluated, with changes made as required to keep the plan on track. Control systems should be developed and implemented to facilitate this monitoring. Standards of performance are set, the actual performance measured, and appropriate action taken to ensure success.

Business ethics, social responsibility, and environmental sustainability are interrelated and key strategic issues facing all organizations. Global/international issues also impact virtually all strategic decisions today; even for small firms. The advantages of engaging in international business may well offset the drawbacks for most firms. It is important in strategic planning to be effective, and the nature of global operations may be the key component in a plans overall effectiveness.

2.5 Strategic Management and Planning; Its PurposeStrategic management is a process through which strategists use information to make decisions about an organizations direction. It is a set of managerial decisions and actions that determines the long-run performance of a corporation.

Strategic planning is a process that represents a part of strategic management. It is the process of analyzing the opportunities and threats in the marketplace, while building the strengths and correcting the weaknesses within the firm. It also involves action goals for specific product markets and for the firm. It includes understanding of the firms vision, mission, values and strategies. It describes where you want your company to go but not necessarily how youre going to get there. Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence activities- and thus to exert control over its own destiny. Strategic management and planning has the purpose of gaining certain benefits that can give the firm opportunities to be successful. Strategic management and planning have been conducted by the organizations for the following purposes: To help organizations formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice; Historically, the principal benefit or purpose of strategic management and planning has been to help organizations to formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice. This certainly continues to be the major benefit of strategic management but research studies now indicates that the process, rather than the decision or document, is the more important purpose of strategic management. This purpose can be done through strategic planning through the involvement of the process of communication; as what they have said, communication is considered as a key to a successful strategic management.

To achieved understanding of and commitment from all managers and employees; The major aim of the process is to achieve the understanding of and commitment from all managers and employees. Enhanced communication through dialogue and participation can lead to a deeper or improved understanding of the others views and of what and why the firm is doing or planning. When managers and employees understand what the organization is doing and why they are doing this, they often feel that they are a part of this and become committed to assisting it. They will have a greater commitment in achieving goals, implementing strategies and in working hard. The overall result of this is that all managers and employees will be on a mission of helping the firm to succeed.

To give opportunity of empowering individuals; A great purpose of strategic management and planning is its opportunity to empower individuals. Empowerment is the act of strengthening employees sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so. More and more organizations are decentralizing the strategic management process in which they involve lower level managers and employees in planning. An example of this is the Jhonson and Jhonson, a broadly based health care company that is organized on a principle of decentralized management. Senior management groups at each operating company are responsible for their own strategic plans. In developing these plans, their people worldwide are guided by and united in carrying out the ethical principles and responsibilities outlined in their Credo.

-

To gain financial benefits; According to research, organizations using strategic management concepts are more profitable and successful than those who do not. Businesses using this concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities. Those high performing companies achieve this through their strategic plan in which they tend to prepare for future fluctuations in their external and internal environments.

To enhanced awareness of external threats; Examples of these external threats are those of the natural environment brought about by the unpredictable climate and scarce resources.

To improved understanding of competitors strategies; To increase employee productivity; To give each individual in the organization a clearer understanding of performance-reward relationships;

-

It can give each individual in the organization a clearer understanding of performance-reward relationships by empowering their employees.

To enhanced the problem-prevention capabilities of organizations; Strategic management also enhances the problem-prevention capabilities of organizations because it promotes interaction among managers at all divisional and functional levels.

To bring order and discipline to an otherwise floundering firm; Instead of panicking during those difficult situations, a strategic plan can help firms take those situations lightly. Also, it can be the beginning of an efficient and effective managerial system. Strategic management can renew confidence in the current business strategy or point to the need for corrective actions.

To help managers and employees view change as an opportunity rather than as a threat. The strategic management process provides a basis for identifying and rationalizing the need for change to all managers and employees.

Remember that strategic management and planning is truly an opportunity to success but it is not a guarantee for success. It can be functional or dysfunctional depending on how the organization has conducted or executed their strategic management process.